Original Title: "Web3 Japan Market: Latest Data, Scale, and Interpretation for 2025"
Original Author: AB KUAI DONG, Cryptocurrency Content Creator
After sharing the article "Web3 Practitioners' Relocation and Local Living in Japan," I have repeatedly mentioned that many colleagues living and working in Japan do not engage with the Japanese market. However, many friends are still eager to understand the specific conditions of Japanese users and the industry.
It has been noted that research and materials related to the Japanese Web3 market in the Chinese-speaking region are relatively outdated. Therefore, I have decided to update with a new study on the Japanese market.
This article cites various data and information from the Japan Cryptocurrency Association, the Financial Services Agency of Japan, compliant exchanges, etc., for research and reference purposes only.
The main contents of this article include:
· Japanese Web3 Market (Growing User Base)
· Scale and Growth of the Japanese Cryptocurrency Market (Opportunities?)
· Investor User Group Profile (Not Engaging On-Chain?)
· Government Regulation (Attitude Towards Non-Compliant Offshore Locations?)
· Controversy Over Tax Rates (Increase or Decrease?)
· How Project Parties Operate (Legal Risks?)
Japan's Web3 Market
Overall, although Japan is one of the more developed countries in Asia with a population of 124 million, the number of young people is gradually decreasing. Amidst the thriving local stock market, real estate, anime culture, and tourism, people's attention has become very fragmented, leading to less motivation for young people to focus on crypto, with the middle-aged group being the majority.
However, due to the global promotion and popularity of cryptocurrencies, the local participation in crypto in Japan is also accelerating, and by May 2025, user numbers and transaction volumes are expected to reach new highs.
Characteristics: A user group of 12.41 million, primarily consisting of 30 to 40-year-old middle-class individuals who are investment-oriented, favoring long-term allocations rather than pure speculation. Those with an annual income below 7 million yen (320,000 RMB) comprise the majority, and the high capital gains tax on cryptocurrencies (most are holding without selling, awaiting the 2026 tax reduction policy).
The Scale and Growth of the Japanese Cryptocurrency Market
In 2022, the total spot trading volume of compliant exchanges in Japan was only about 1 trillion yen (approximately 6.8 billion USD), and in 2023, it rose to 1.13 trillion yen (approximately 7.6 billion USD), representing an increase of only about 13%.
However, by 2024, following the widespread adoption of Bitcoin by Wall Street, the total spot trading volume of cryptocurrencies in Japan immediately surged to 2.06 trillion yen (approximately 14 billion USD), marking a year-on-year growth rate of 82%, finally establishing itself as a sizable market.
In terms of trading varieties: Bitcoin (BTC) accounts for approximately 70%, while Ethereum (ETH) comprises only about 14%. This has led many compliant exchanges in Japan to primarily promote Bitcoin in their advertising and customer acquisition efforts; for example, advertisements for Bitcoin frequently appear on platforms like TikTok.
Additionally, starting in 2024, the popularity of XRP slightly surpassed that of ETH.
The cryptocurrency market with 12.41 million users
Although this figure might seem acceptable, with at least 12.41 million cryptocurrency users, it is important to note that this growth only began in 2024.
In 2022, the number of cryptocurrency users in Japan was only 5.61 million; in 2023, it reached 6.46 million, with a growth rate of only 15%; however, by 2024, this figure surged to 9.17 million, marking a growth rate of 41%.
As of May 2025, it has further reached 12.419 million. Thus, the Japanese cryptocurrency market is experiencing accelerated growth in domestic users, with the total amount under custody exceeding 4.26 trillion yen (approximately USD 2.75 billion).
Investor User Profile
By May 2025, the number of cryptocurrency users in Japan had reached 12.41 million, accounting for approximately 15% of the adult population.
Among these, the primary investors are middle-class individuals aged 30 to 40, characterized by the following traits:
· Heavily reliant on YouTube, X, and other social media
· Possessing a stable income to a certain extent
· Annual income below 7 million yen
In terms of investment behavior and motivation:
· Financial management-oriented, leaning towards long-term allocation, not speculative
· Mostly small-scale participation, operating through exchange apps
· Low trading frequency, with most participants placing orders only a few times throughout the year
· On-chain native players, comprising only a very small group
Therefore, overall, the user base of cryptocurrency in Japan is gradually becoming more mainstream, but with a preference for safety and convenience.
This has also led to the observation that most project teams and exchanges in Japan find that advertising in the media is less effective than establishing long-term partnerships with influencers on platforms like YouTube and X. Consequently, the Japanese cryptocurrency community has become a space where everyone is becoming an influencer, while traditional media is increasingly under pressure.
Regulatory Environment
Japan's cryptocurrency regulatory model is quite similar to that of the United States, involving a three-tier collaboration among the FSA (Financial Services Agency), JVCEA (Japan Virtual Currency Exchange Association), and JCBA (Japan Cryptocurrency Business Association).
Therefore, it is observed that most cryptocurrency enterprises operating in the Japanese market are members of both JVCEA and JCBA. For instance, Binance Japan has publicly announced its membership in the JVCEA on Twitter.
Currently, for exchanges and custodians to operate legally in Japan, they must possess the appropriate qualifications and licenses to join these associations. In recent years, asset management institutions and exchanges entering the Japanese market have generally adopted shell company strategies to conduct operations.
Attitude Towards Non-compliant Offshore Exchanges
In addition to the compliant exchanges mentioned above, there have also been numerous non-compliant exchanges promoting and operating in Japan, attracting a large number of users. The primary reason these users engage with offshore exchanges is as follows:
• Tax avoidance and tax evasion
• Diverse types of cryptocurrencies
• Comprehensive range of leverage and contract products
Currently, these types of exchanges faced a crackdown from the Japanese Financial Services Agency and the government in February 2025. Relevant download and access channels have been completely removed from the Apple Store and Google Store in Japan, and some Japanese bloggers who assisted in promotion have also received notification letters.
However, since Japan does not impose web access restrictions, Japanese users can still access these offshore non-compliant exchanges. To this day, there remains a portion of the user base trading on these platforms, although local promotion has become relatively conservative.
Controversy over tax rates
Previously, local statistical agencies found that a common reflection from surveys of cryptocurrency users indicated that the tax burden and reporting costs were pain points, especially as most Japanese retail investors treat cryptocurrency as an investment (holding coins), which has increased the complexity of comprehensive taxation and accounting, raising the barriers to usage.
As is well known, if you purchase 30 million yen worth of BTC through a local compliance agency and make a profit, in the following year you will be liable for 45% miscellaneous income tax plus 10% resident tax, totaling approximately 55%.
Currently, the Financial Services Agency has confirmed the inclusion of cryptocurrency taxation in the adjustments for 2026, aligning cryptocurrency with stocks to be subject to an approximate tax rate of 20%.
In other words, investors will ultimately only need to pay a maximum of 15.315% national tax and 5% local resident tax. Furthermore, once this tax is paid, it is equivalent to being fully compliant, with no further payments required thereafter. For corporate investors, only a 15.315% national tax is payable, excluding local taxes.
Currently, this expected implementation is set to coincide with the arrival of Japan's BTC and XRP spot ETFs in 2026.
How project parties operate
Finally, the most frequently asked question recently is how project parties operate in Japan and what restrictions they will face.
According to previous statistics, there are currently at least over 20 notable project parties that have offices and residence in Japan, most of which operate under the guise of research and development companies.
The primary reason is that if project parties wish to conduct large-scale operations in Japan (such as fundraising through token issuance aimed at Japanese users or launching on compliant Japanese exchanges), they must undergo scrutiny by the JVCEA (Japan Virtual Currency Exchange Association). Therefore, compared to Southeast Asia and Dubai, the compliance threshold is higher, resulting in significant costs.
As a result, most project parties in Japan do not engage in the Japanese market. Operations and token issuance activities are conducted through BVI or other offshore entities; fixed costs such as personnel, product development, and office expenses are managed through Japanese entities.
This is also a common depiction of both domestic projects in Japan and foreign projects operating in Japan.
People are in Japan but do not engage in the Japanese market.
I hope the above information is helpful to you.
